Bitcoin in crisis of confidence: why institutional backing is no longer enough

Bitcoin’s weakness has left the fading enthusiasm that characterized the market just three months ago. Not due to a systemic collapse or regulatory crisis, but because of something more unsettling: the absence of genuine demand. With a price of $91.23K ( very low compared to the October peak of $126.08K) and an accumulated decline of -9.99% this year, the market faces a problem that no regulatory statement can resolve.

When good news stops mattering

Over the past two years, Bitcoin should have experienced a solid breakout. Corporate investors expanded their holdings, regulatory frameworks were refined, and Western governments showed unprecedented openness toward digital assets. In early 2025, Bitcoin ETFs channeled billions of dollars into the market. All the pieces were in place.

However, the market has not responded. Trading volume remains depressed, ETF flows turned negative, and not even constant purchases by companies like MicroStrategy have managed to halt the decline. This reflects an uncomfortable reality: the factors that once drove bullish prices no longer generate enough traction.

The fall of speculative leverage

The October correction liquidated leveraged positions worth approximately $19 billion, drastically reducing risk exposure. Since then, leverage has not been significantly rebuilt. Financing rates remain low, the options market reflects caution rather than optimism, and traders prefer to exit positions rather than open new bullish bets.

This is not panic. It’s disinterest.

This dynamic has created a slow but sustained spiral: participants ready to sell but hesitant to buy, creating a demand vacuum that pressures prices without the need for massive volume.

Disconnection from traditional markets complicates the outlook

While the S&P 500 reaches all-time highs and tech stocks lead the rally, Bitcoin remains lagging. This divergence suggests that a general risk appetite is no longer enough to sustain the main cryptocurrency. Ecosystem-specific factors now completely dominate price movements, isolating Bitcoin from the dynamics that historically provided support.

Pressure from within: long-term holders are retreating

Many long-term investors who accumulated Bitcoin at substantially lower prices are taking advantage of current prices to liquidate positions. This behavior, common after large gains, has become particularly problematic when fresh buyers are absent to absorb the supply. Sector analysts say the industry has met important regulatory and institutional milestones, but prices have not validated these achievements, reinforcing a short-term cautious sentiment.

The market maturation dilemma

If Bitcoin ends the year in the red, it will be the fourth annual decline in its history. The difference is that this time there is no obvious crisis. No systemic contagion, no regulatory collapse, and no sudden loss of institutional access. Instead, the market faces a transition toward a more mature structure where leveraged speculation has less weight, demand is more selective, and conviction must be based on stronger arguments than mere positive sentiment.

Until renewed participation emerges in significant volume, Bitcoin will remain under pressure. Investors not only need reasons to buy; they need to see others buying as well. Until then, the absence of negative catalysts will not be enough to reverse the current trend.